An Asset Is Purchased on January 1 for $40,000

question 228

Multiple Choice

An asset is purchased on January 1 for $40,000.It is expected to have a useful life of five years after which it will have an expected residual value of $5,000.The company uses the straight-line method.If it is sold for $30,000 exactly two years after it is purchased,the company will record a:

• A)gain of $6,000.
• B)gain of $4,000.
• C)loss of $4,000.
• D)loss of $6,000.

---

Definitions:

Americanize

The process of assimilating or causing someone to assimilate American customs, values, and ways of life.

Southeast Asia

A geographic region in Asia that includes countries such as Indonesia, Malaysia, Singapore, Thailand, and Vietnam, known for its cultural diversity and economic growth.

Credibility

The quality of being trusted and believed in, often used in contexts relating to individuals, organizations, and information sources.

Gulf of Tonkin Resolution

A 1964 Congressional resolution that authorized President Johnson to use military force in Vietnam without a formal declaration of war, significantly escalating U.S. involvement in the Vietnam War.